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New construction might help ease housing crunch in pricey Ventura County

Fore Property Co., which has offices in Santa Barbara, is building 104-unit affordable apartment complex for seniors in Camarillo.

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The Fore Property Co. is building 104 affordable apartments for seniors at Springville Drive and Camino Tierra Santa in Camarillo. The company is also building a market-rate apartment complex in the same area that will have 213 units. Local housing officials say developments like these will play a role in easing the shortage of housing in Ventura County.(Photo: JUAN CARLO/THE STAR)Buy Photo

A few minutes after the open house sign went up on a sunny March afternoon, the beachside home on Pierpont Boulevard in Ventura was bustling with prospective homeowners.

The tranquil community is only a short walk from the beach and a shopping center is close by. Highway 101 is also easily accessible, although far enough away to be unobtrusive. Open houses, beachside or otherwise, are dotting Ventura County’s streets with increasing frequency as real estate agents gear up for the busy spring selling season.

For Ventura resident Mel Vincennes, who visited the Pierpont Boulevard open house last month, it was the ideal time to begin looking for a new home.

“I’m always out looking for bigger and nicer homes to see what the market is like,” said Vincennes, 51. “When I was looking for homes two or three years ago it was hard to find something but now I see a lot of places that have availability. It seems like we’re in more of a buyers’ market.”

Spring is traditionally the busiest period for the housing market and prospective buyers such as Vincennes are actively surveying the housing landscape. The 2018 spring selling season could be particularly telling for Ventura County housing market, which has become increasingly expensive in recent years as demand continues to outstrip housing development.

New policies

Although home prices are continuing to rise, local officials are optimistic that policymakers and builders are becoming more willing to rise to the challenges posed by the county’s housing market. Jeff Lambert, community development director for the city of Ventura, said there has been a renewed interest among policymakers and developers alike to create housing in Ventura and the rest of the county.

“The policy we adopted in 2005 is infill first, building within city limits and increase density to accommodate our growth without pushing onto ag land,” Lambert said. “We saw a lot of activity and projects getting approved but the economy tanked. Now those projects are getting off the ground because the economy is better and financing is available.”

Ventura County’s median home price was $550,000, according to the most recent monthly data released by CoreLogic, an Irvine-based firm that tracks the housing industry. Median housing prices and sales tend to spike from February to March as the spring selling season kicks off.

Housing prices will likely continue to rise in Ventura County, said Maggie Bird, an associate at RE/MAX Gold Coast Realtors who held the open house on Pierpont Boulevard. Prospective homeowners should keep a close eye on properties in their price range, as high demand causes available homes to quickly be taken off the market.

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Miguel Leon nails a piece of wood to frame the attic floor at the Fore Property Co. building site in Camarillo where a new affordable apartment complex for seniors is under construction. The apartments are expected to be finished in August. JUAN CARLO/THE STAR

Jose caballero puts up fire sprinklers at the Fore Property Co. building site at Springville Drive and Camino Tierra Santa in Camarillo. The company is building both affordable units for seniors and market-rate apartments at the Springville site. Some experts say new construction like these buildings will help ease Ventura County's housing shortage. JUAN CARLO/THE STAR

Arturo Trujillo nails a piece of wood to frame an arch at the Fore Property Co. building site in the Springville area of Camarillo. The company is building an apartment building that will have affordable units for seniors. JUAN CARLO/THE STAR

Evan Caron ties scaffolding together at the Fore Property Co. building site in Camarillo. Fore is building 104 affordable apartments for seniors. The development in the Springville area of Camarillo will have 74 one-bedroom and 30 two-bedroom units. JUAN CARLO/THE STAR

The Fore Property Co. is building 104 affordable apartments for seniors at Springville Drive and Camino Tierra Santa in Camarillo. The company is also building a market-rate apartment complex in the same area that will have 213 units. Local housing officials say developments like these will play a role in easing the shortage of housing in Ventura County. JUAN CARLO/THE STAR

Miguel Leon cuts a piece of wood to frame the attic floor at the Fore Property Co. building site in Camarillo. The company is building 104 affordable apartments for seniors at Springville Drive and Camino Tierra Santa. JUAN CARLO/THE STAR

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“We have an extreme supply-and-demand issue in the county, especially since the Thomas Fire,” Bird said. “Anything in the affordable range is very much in demand right now and what we call low to mid-end properties in some neighborhoods and cities here, would be very high-end in other places.”

Ventura County is typically the third most expensive county in Southern California, behind Orange and Los Angeles counties, although its prices usually closely trail the latter county. CoreLogic analyst Andrew LePage noted that Ventura County occasionally outpaces Los Angeles County in median housing prices. Ventura County was more expensive than Los Angeles County in February 2016 and November 2017, according to LePage.

That said, CoreLogic data typically downplays month-to-month changes in favor of more long-term trends. Ventura County’s small size and limited housing inventory can cause its housing market to be more unpredictable than those of neighboring regions, LePage said.

“Because Ventura County is a smaller county, its year-to-year price changes tend to be more volatile since it is based off significantly lower sales compared to other counties,” LePage said. “Inventory is key to the kind of market we have and there is tight existing inventory.”

Regardless, prices are on the rise and the county is one of the most consistently expensive locations in the already pricey Southern California area. Ventura County’s limited housing inventory, coupled with high demand for new housing, has resulted in a supply and demand issue that is causing prices to surge.

Housing squeeze

Ventura County’s lack of available housing is one of the region’s most significant economic constraints, according to Matthew Fienup, an economist and executive director at California Lutheran University’s Center for Economic Research and Forecasting in Thousand Oaks.

A February forecast released by the center noted that Ventura County began suffering from a recession in 2016 and projected it would continue for several years. The February forecast cited lack of housing as one of the area’s key issues.

Although the center’s recent forecasts have been grim, Fienup said policymakers have begun working on improving the region’s housing market to help curtail Ventura County’s economic issues.

Fienup expressed newfound optimism about local attitudes toward housing development and expects policymakers to begin working to alleviate Ventura County’s housing market issues.

“There’s no doubt that the poor economic data released last summer was a wake-up call for policymakers in Ventura County,” Fienup said. “The conversation has changed and policymakers across the county are looking for creative solutions. I don’t expect that the homeownership rate will get back to the pre-recession high anytime soon but I think that is healthy because in the housing bubble there were clearly people owning homes that did not have the prerequisite resources.”

Data released by the Bureau of Economic Analysis, a government agency in the United States Department of Commerce, last year noted that Ventura County’s gross domestic product (GDP) fell by 2.7 percent in 2016 following two years of near nonexistent growth, which Fienup considered to be a sign of a local recession. He cited low wages and a prohibitively expensive housing market as key issues that are constraining Ventura County’s economic prosperity.

Still, Fienup considered recent development efforts in Thousand Oaks to be a prime example of positive change. He noted the city of Thousand Oaks performed a comprehensive baseline analysis to determine how much housing was permitted and then engaged in policies to shift density around to allow more development along Thousand Oaks Boulevard and Highway 101.

While median housing prices have steadily climbed in recent years, Ventura County has not quite reached the all-time high the region experienced during the 2006-2007 housing bubble. Though Fienup expected Ventura County’s housing prices to eventually surpass its historical high, he added inflation could be a contributing factor and obscure the practical implications of a new all-time high median housing price.

Although all sorts of housing construction, from affordable housing projects to market-rate apartments, homes and high-end mansions, is underway throughout Ventura County, the county still has a long way to go to begin rebalancing its longstanding issue of supply and demand.

The Regional Housing Needs Allocation, a state-mandated process that outlines the minimum amount of housing construction cities and counties are required to plan for, tasked Ventura County and its cities to plan for a total of 19,158 homes by 2021. The housing needs goals for Ventura County and its cities required planning for 4,516 very low-income homes, 3,095 low-income homes, 3,544 moderate-income homes and 8,003 above moderate-income homes.

The county is not on track to meet any of those goals, according to a March report published in The Star.

Still, construction projects are progressing and some of them will result in hundreds of new homes for prospective residents within the next year.

Construction crews have been working at a site between the Spanish Hills area and Highway 101 in Camarillo since March 2017 working on two separate apartment complexes.

New apartments

The properties, a senior affordable apartment complex and a market-rate apartment complex, are being developed by Fore Property Co., a national real estate developer with offices in Santa Barbara.

The senior affordable apartments will include 104 units, while the market-rate apartments will include 213 units. Both will have a combination of one-bedroom and two-bedroom units. Construction on the senior apartments is scheduled to finish by August and tenant applications will open shortly after, while construction on the market-rate property will be completed sometime in the second quarter of 2019.

Rent for the senior affordable apartments will likely range from $884 to $1,306, while the market-rate apartments could range from roughly $2,100 to $2,600, according to Jonathan Cornelius, vice president at Fore Property Company. He noted that while it can be difficult to develop housing in Ventura County due to strict regulations, it means developers who invest in construction will likely reap the financial benefits.

“Ventura County is a challenging place to develop with high barriers to entry, so if you do get something built, you’ll do well in the long term,” Cornelius said. “I don’t think anyone wants Ventura County to become the next Orange County, as far as development goes, so we need to keep pace with growth.”

Cornelius expects both the apartment complexes his company is constructing, particularly the senior affordable project, to fill up with tenants shortly after applications open.

“We have an interest list of 50 people who have called or expressed interest in moving into the senior affordable project and we haven’t begun any sort of marketing,” Cornelius said. “Ventura County is an expensive place to live and you’re talking about a significant discount from market rents. Those units will go extremely fast.”

For some, the county’s housing market constraints are less a challenge and more a financial opportunity.

The spring selling season is an ideal time to invest in real estate, according to Calgary, Canada, resident Wendi Harty. Harty, who toured the Pierpont Boulevard property with her brother and sister during a family reunion, noted that beachside properties can be lucrative purchases.

“We’re looking at potential vacation homes and rentals in Ventura County,” Harty, 57, said. “We grew up in South Bay, which is getting too crowded, so we’re checking out Ventura. If you bought a home for investing here I think you could get a good rent for it.”

Bird agreed, noting Ventura County’s valuable real estate and rising popularity make spring the ideal season for investors to purchase homes in the area. Although she did not consider an influx of investors scoping out Ventura County’s real estate to necessarily be a negative for the region’s housing market, she noted that it could further increase competition for all prospective buyers.

“I have seen significantly more potential investors than I used to,” Bird said. “To purchase now and collect a couple years of rent is very attractive to people who can swing that. This is an ideal market for investors.”